SKF Q2 Results Exceed Expectations Revenue for the First Half of the Year Still Falls 7.5%

The Swedish bearing manufacturer SKF announced that with the signs of recovery in the European auto market, the company’s profitability in the second quarter has improved compared to the first quarter, exceeding the industry’s average expectations, but operating income and net profit are still declining year-on-year.

SKF's second-quarter operating income reached 16.39 billion kronor (about 2.49 billion U.S. dollars), down 4.6% from 17.17 billion kronor (about 2.6 billion U.S. dollars) in the second quarter of 2012; second-quarter net profit was 1.1 billion. Krone (about 170 million U.S. dollars), which is equivalent to 2.36 kroner per share (about 0.36 U.S. dollars), has fallen 11.3% year-on-year.

In February 2013, Standard & Poor's downgraded SKF’s long-term credit rating outlook to negative, which means that if the company’s profitability does not improve within one year, its long-term credit rating may be reduced. In the first quarter of 2013, SKF's net profit fell sharply by 38% from the same period of last year.

SKF CEO Tom Johnstone said that the company’s second-quarter market demand exceeded its expected level released in April, and the profitability of the auto parts business has improved, with its truck and vehicle services. The demand in the market has obviously improved. Although SKF’s business in the industrial market did not improve, the company still received several important orders in the last quarter.

In the first half of 2013, SKF’s operating income totaled 31.54 billion kronor (approximately US$4.78 billion), and its operating income for the same period in 2012 was 34.11 billion kronor (approximately US$5.17 billion), a year-on-year decrease of 7.5%; net profit for the first half of the year The 2.57 billion kronor (about 390 million U.S. dollars) in the same period last year fell to 1.92 billion kronor (about 290 million U.S. dollars), a year-on-year decline of 25.2%.

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